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Brave New World

Áine Hurley, Head of the HR practice, says it’s time for CEOs to be bold when making their next Chief People Officer appointment

31 Jan 2017

If you are the CEO of a FTSE 100 company, how would you answer this question? When recruiting your next Group HR Director or Chief People Officer do you really consider the widest pool of talent available or do you opt for what might be the ‘safe approach’?

Let me explain.

As businesses extend their global reach and look to rapidly expand their customer base, the need for commercial, driven, innovative HR leaders with diverse experience has never been greater.

Who wouldn’t want to recruit an HR leader who not only has deep functional knowledge but also has knowledge of procurement or communications, property or health and safety? Who wouldn’t want a Group HR Director who has true global experience, understands customer-centricity, is tech savvy and can think creatively about issues both in and out of the boardroom? A Chief People Officer who can add significant value to the board debate.

It might seem self-evident to say the UK’s leading public companies should want – indeed need – to hire HR leaders with this multi-faceted experience, but in many cases this does not happen. Why?

One explanation centres on the concern that if individuals lack previous experience of, say, working with the Remuneration Committee or are not au fait with the latest UK governance changes – perhaps they have been working in overseas markets – then they could be overlooked for vital UK plc roles.

Instead, CEOs might be attracted to individuals who have held the number one position in another quoted company in the UK because, simply, it is a safer option. Although understandable, is this taking too narrow a view?

Changes in UK corporate governance and the vital role Remuneration Committees play in ensuring remuneration arrangements support the strategic aims of the business and satisfy shareholders, are not being questioned here. Rather, what I am keen to stress is that in a rapidly changing business environment isn’t it just as important to ensure that top talent brings strategic thinking, genuine diversity and a new perspective to the leadership team? Rather than choose only those who have already occupied the role, CEOs have a unique opportunity to bolster their teams with talented HR leaders who offer genuinely fresh thinking and are ready to step up to the plate.

Meanwhile, up-and-coming HR professionals with multifaceted experience can enhance their chances of attaining the number one role by engaging in extraneous activities such as gaining board exposure outside of their own organisation. This can include non-executive roles or becoming trustees of a charity or an NHS Trust before they reach that number one seat. Obtaining early exposure to the complex dynamics of a board will stand them in good stead and certainly help them to step-up.

It is a potent combination for an aspiring Group HR Director to have in his or her armoury, this breadth of board experience and commercial exposure outside the function.

I am hugely optimistic and believe that CEOs genuinely want a broader contribution from their HR partner, one who can bring greater commercial nous to the leadership team. If he or she has been exposed to – and understands – board and Remuneration Committee demands, can engage with shareholders and can be directors of the business first and HR leaders second, the future is bright.

The tension that currently exists and which is perhaps encouraging CEOs to choose a safer option does not, in my view, do justice to the wealth of potential HR leaders out there who can bring the level of dynamism to a board that has never before been so urgently required.